Climate

In order to protect the environment, the EU wants to reduce greenhouse gases by at least 20% by 2020 as compared with 1990 levels. The economy is to be largely de-carbonised by 2050, allowing greenhouse gas emissions to be reduced by 90%. cep follows EU proposals such as the European Emissions Trading System, the reduction of CO2 emissions from vehicles, plans for energy efficiency and environmentally sustainable product design ("Eco-design") as well as the promotion of renewable energy.

Emissions from Land Use and Forestry (LULUCF) (Regulation)

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On the basis of an EU Commission Regulation, the emissions and removals of greenhouse gases (GHGs) in the land use and forestry sector will be fully included into EU climate policy. As a result, the quantity of GHG emissions in this area will no longer be permitted to be greater than the removals of GHGs by way of absorption into the ground or by plants or wood products.

The EU Commission will allocate Member States with national targets for reducing greenhouse gases (GHG) in sectors not subject to EU emissions trading (ETS) (e.g. transport and agriculture). It also proposes flexibility options which Member States can use to achieve their national targets.

The EU Emissions Trading System (ETS) is an ecologically sound and economically effective instrument for climate protection. In cep's view, the ETS can only contribute to global climate protection if carbon emissions that are reduced in the EU are not simply moved to third countries (carbon leakage).

The EU has set out in a Communication how the European Union will implement the global climate change agreement concluded in Paris. In cep's view, the Paris Agreement is a necessary step towards effective climate protection. The Commission's assertion that the provisions on carbon leakage are "balanced" is, however, incorrect.

In 2014, the European Council laid down stricter targets for reducing carbon emissions for the period 2021-2030. The 2030 reduction target in the sectors covered by the EU Emissions Trading System (ETS) amounts to at least 43% as compared with 2005 levels. In order to achieve this, the EU-wide permitted volume of emissions ("Cap") will be reduced annually from 2021 by 2.2% instead of the current 1.74%. In addition, the "benchmarks", which aim to create incentives for reducing carbon emissions and are based on the average emission volume of the 10% most efficient installations in a sector in 2007 and 2008, will be subject to a blanket reduction.

In its revision of the Directive on the EU Emissions Trading System (EU ETS), the EU should even after 2020 issue free allowances to companies at risk of emigrating in order to prevent the relocation of carbon emissions to non-EU countries.

The European Council has agreed on the following key targets for the future climate and energy policy of the European Union for the period from 2021 to 2030: (1) to reduce the EU’s domestic greenhouse gas emissions by 40% relative to 1990 levels; (2) to increase the proportion of renewable energy to 27% of overall EU energy consumption; (3) to reduce projected energy consumption by 27%; (4) to increase the level in each Member State of electricity interconnections to other Member States to 15% of their installed production capacity.

The European Council calls for the EU Emissions Trading System (EU ETS) to be developed to the main European instrument to prevent climate change. The cep examines how an extension of the EU ETS, for example on the road transport sector, can induce effective and efficient climate protection. It is straightforward that an extension of the EU ETS using the upstream approach can be implemented and is preferable to regulatory climate change measures.

The European Commission clarifies its Strategic Framework for an Energy Union and the associated climate and energy policy measures which it is planning for the coming years. It supports inter alia in this regard an expansion of cross-border gas infrastructure in the EU and tighter CO2 limits for motor vehicles.

As part of the United Nations Framework Convention on Climate Change (UNFCCC), 90 developed and developing countries, including those of the EU, have pledged to "curb" their greenhouse gas emissions by 2020 in order to prevent damaging consequences for climate change. As these commitments are not sufficient to prevent the severe impact of climate change, a Climate Change Agreement, legally binding for all parties, should be concluded as a Protocol to the UNFCCC in Paris in December 2015 and implemented from 2020 onwards. The European Commission wants to prepare the EU for the final round of international talks prior to the Climate Conference in Paris and therefore defines the requirements that the EU has in relation to the planned Paris Protocol.

In the EU, operators of fixed installations and aviation companies are only allowed to emit greenhouse gases where they have emission rights. The fall in the price of emission allowances results, in the Commission's view, from an "imbalance between supply and demand". It wants to remove this imbalance by introducing a "market stability reserve". Depending on market conditions, stabilisation of the allowance market will be achieved either by removing allowances from the market and placing them in the reserve, or by releasing them from the reserve and channelling them into the market.

The European Commission proposes new targets for 2030 for the reduction of greenhouse gas emissions and the development of renewable energy. An energy-efficiency target will not be discussed until autumn 2014 following the assessment of the Energy Efficiency Directive. Consultation will take place, in the framework of a new "governance structure", between the Commission and the Member States regarding the latter's plans for climate and energy policy.

With renewables taking up a growing share of energy production, the European Commission wants support for renewables to be carried out more competitively. For this purpose, feed-in tariffs should be largely replaced by feed-in premiums and quota models. Degressive elements of the support system should mean that overcompensation and distortions of competition are avoided. Support for existing installations should not be changed retrospectively.

The European Commission argues in favour of targeted support for CCS and puts various options up for discussion: subsidies for CCS investors, CO2 emission performance standards or a mandatory CCS certificate system for carbon emitters such as power stations and industrial plants.

Airlines can only emit greenhouse gases if they own the corresponding emission rights ("certificates"). Since 2012, all flights have, in principle, been obliged to own certificates for the entire flight distance between two EU airports and flights between an EU airport and an airport in a non-EU country. As the inclusion of aviation in the EU Emission Trading System (ETS) has come up against considerable international opposition, the EU resolved that, in 2012, the ETS would only apply to flights between EU airports. The European Commission now proposes that airlines should require certificates for emissions from flights to and from third party countries between 2014 and 2020 in respect of the distance flown over the European Economic Area (EEA).

The European Commission initially wants to adopt non-binding guidelines to make it easier for the Member States to adapt to the negative consequences of climate change. For this purpose, the Commission wants to support the build-up and provision of knowledge about adaptation measures. In addition, the European standardisation organisations are to examine whether industry standards, in the areas of energy, transport and construction, take sufficient account of climate change.

The European Commission wants to bring in a system to monitor, report and verify CO2 emissions and other climate-relevant information from ships ("MRV system"). On the one hand, the data will create a basis for further political measures. On the other, companies will gain a better overview of cost reductions.

The European Commission argues in favour of an early agreement on Climate and Energy Policy to 2030. The discussion centres on the question of the number and definition of targets and how these can be achieved, efficiently and effectively, taking account of competitiveness and security of supply.

The EU Commission argues in favour of including all major "economies and economic sectors" into an international climate change agreement with legally binding emission reductions and introducing carbon pricing for international aviation and maritime transport.

In the EU operators of fixed installations and aviation companies may emit greenhouse gas emissions only if they possess the corresponding emission allowances. According to the Commission, the reduction of prices for emission allowances is a result of the “imbalance between supply and demand”. Now, it proposes options for eliminating structurally and sustainably what it perceives as a "supply-demand imbalance“ in the EU emissions trading system (EU ETS).

The Commission wishes to reduce the greenhouse gas emissions caused by indirect land-use changes. To this end it wishes to limit the amount of how much conventional biofuels count to a maximum of five percentage points of the 10% expansion target, amongst other things.

Due to the economic crisis, the demand for and price of CO2 emission allowances are lower than originally expected. As a result, the Commission holds that the functionality of the EU emission trading system is jeopardised. Therefore, it wishes to be afforded the possibility to change the timetable for auctioning emission allowances in order to be able to temporarily hold back these allowances (“backloading“).

In order to limit global climate change to a global warming of below 2°C, the EU is to move towards a “competitive low carbon economy” in 2050. To this end, the Commission presents a roadmap for possible action up to 2050 which could enable the EU to meet its climate protection target for 2050. The roadmap is based on analysis of alternative scenarios.

Since 2005 the framework of EU emission trading system (ETS) allows for certain stationary installations (e.g. for power and heat supply, for metal production and processing, for paper production and for the chemical industry) and, as of 2012, air traffic may emit greenhouse gases only if the operators possess the according allowances. Pursuant to the ETS Directive as of 2012 Member States must auction all allowances for aviation and as of 2013 for stationary installations which are not allocated free of charge. The submitted Regulation Draft affects the timing, administration and other aspects of auctioning of these greenhouse gas emission allowances.

The latest economic crisis has led to a substantial reduction in EU greenhouse gas emissions. The Commission is examining the option of tightening greenhouse gas emission targets in 2020 from 20% to 30%. At the same time, it stresses that the current Communication’s purpose “is not to decide now” to move to a 30% target since “the conditions set are have clearly not yet been met”. However, it keeps this option still open.

The Commission criticises the fact that the agreement among 29 Heads of State and Government on the Copenhagen Accord “falls well short“ of the EU’s objective to reach a “robust and effective legally binding“ follow-up agreement to the Kyoto Protocol. The Commission gives its view on financing of climate actions and adaptation measures, on the shortcoming of the Kyoto Protocol ant on international emissions trading. In order to keep up the momentum of global efforts to tackle climate change, the Commission outlines the main features of its further strategy.

In order to attain independence from fossil fuels, the EU is planning to accelerate the development and introduction of various low carbon technologies with the help of the European Strategic Energy Technology Plan (“SET-Plan”). The Commission substantiates the strategic and technological targets, the planned measures and an estimation of how much private and public investment will be required for the research and development of low carbon technologies until 2020.

Without financial support for developing countries, it is likely that no global climate agreement will be reached. The Commission presents criteria for how these payments should be distributed among developed countries. Further the Commission discusses whether the share of the EU should be financed through the EU budget, a common EU climate fund or using the budgets of Member States.

According to the Commission climate change requires adaptation measures in key policy sectors such as health and social affairs, agriculture and infrastructure. In order to supplement the expenses of Member States and to share burdens, adaptation measures could be financed through EU spending programmes.

The Commission proposes highly ambitious climate protection targets for both developing and industrial countries. To this end, emissions trading is to be extended. In addition, financial support to developing countries is to be partially financed through EU bonds.

The Proposal by the Commission serves to recast the Directive on the energy performance of buildings. In future, when undergoing major renovations all buildings will have to comply with national minimum requirements for the energy performance of buildings. Member States are to set minimum requirements as to ensure that the total costs for the investment, maintenance and operation (incl. energy costs) of a building are minimised during its life-cycle. In addition, the energy performance of a building must be stated in all advertisements for sale or rent and the energy performance certificate must be shown to all prospective buyers or tenants.